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What is the Identity Component of SOX 404?

Regarding compliance mandates, the Sarbanes-Oxley Act (SOX) of 2002 is one of the most comprehensive and rigorous. This act was created in response to several high-profile financial scandals, aiming to reform corporate governance and increase transparency to protect investors. While SOX is broad in scope, one of its key components is identity management. Specifically, companies must ensure that user identities are appropriately authenticated and authorized to protect sensitive data. In this blog post, we’ll explore the identity management requirements of SOX and how they can help your organization meet its compliance goals.

What is Sox?

SOX, or the Sarbanes-Oxley Act, is a piece of legislation enacted in 2002 in response to fraud uncovered at Enron, Tyco International, Adelphia, Peregrine Systems, and WorldCom, which cost investors billions of dollars. The act contains several provisions designed to protect shareholders and investors from accounting fraud. One of the act’s most important provisions is that public companies establish a system of internal controls to ensure that the company’s financial statements are accurate and that its employees follow the law.

Image #1: Access the Internal controls that have access to the financial records is a key part of the Sarbanes-Oxley (SOX) requirement.

SOX Section 404: Management Assessment of Internal Controls

Sarbanes Oxley, SOX mandates a lengthy set of reports and investigation.  To IT the relevant section is section 404: management assessment of internal controls. 

Section 404 is split into two parts, 404(a) establishes the implementation and maintenance of internal controls while 404(b) calls for the audit of these controls to verify their effectiveness. For eligible companies (ones that exceed $75 million in shares held by public investors), they are required to undergo the audits outlined in the regulation. 

How Does it Relate to Identity?

SOX 404(b) reports on the enterprise identity system as an important internal control system. This component ensures that only authorized personnel can access financial information and other sensitive data. To this end, SOX mandates that companies create a consolidated and auditable identity source. This source should contain all employee records, including roles and access rights. Additionally, SOX 404  mandates that two-factor authentication be used for any users with administrative privileges. This ensures that only those authorized to have access.

More relevantly, the identity component of SOX 404(b) requires regular user access reviews. NIST 800-53 v5 PR.AC-1 stipulates the need for frequent access reviews to ensure user accounts are still valid and active. This helps to ensure that users who need access to certain information or resources have it. Additionally, organizations should review users’ access rights regularly to ensure that they only have the access rights they need.

Regular User Access Reviews

However, it is not enough for organizations to infrequently assess access permissions. To effectively meet SOX compliance requirements, user access reviews must be conducted routinely. This ensures that users are given access rights based on their organizational roles and responsibilities. Additionally, organizations should review user accounts to ensure that two-factor authentication is enabled for users with administrative privileges. This helps to protect against unauthorized access and data breaches.

Improving SOX Mandated Identity Controls with YouAttest

The identity component of SOX evaluates a key part of an organization’s internal control system, ensuring that only authorized personnel access sensitive financial data and resources. SOX mandates that organizations create a consolidated and auditable identity source and enable two-factor authentication for users with administrative privileges. Additionally, organizations must conduct regular user access reviews of roles and permissions to ensure that user accounts are still valid and active. 

Image #2: YouAttest is a easily deployed, cloud-based tool for the auditors to automate the User Access Reviews for SOX and other compliance guidances.

With YouAttest, organizations can ensure that they comply with the identity component of SOX. By using the YouAttest cloud-based tool, companies can efficiently review access permissions in a fraction of the time when compared to manual methods. And by automating access reviews, YouAttest eliminates human error so that enterprises can feel confident in their ability to verify their users have the appropriate amount of access to sensitive information and resources. 

Contact us today to learn more about how YouAttest can help improve your usera access reviews for SOX compliance and better identity security.